Shasun Pharma plans Rs 250cr expansion

In an interview to CNBC-TV18, Abhaya Kumar, managing director of Shasun Pharmaceuticals says, the company has huge expansion plans. "Shasun is on a very high expansion spree now, investing more than Rs 250 crore in Vizag and in other places. We have raised Rs 50 crore," he adds. Below is the edited transcript of his interview with CNBC-TV18's Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video. Q: Can you take us through this placement? Why you needed to do it and whether there is more capital raising or equity capital raising in the offing? A: Right now, we have raised Rs 50 crore because we have huge expansion plans. We wanted to ensure that a global healthcare fund invest in the company. It shows the confidence that global healthcare fund has on the fundamentals of Shasun. So, Shasun is on a very high expansion spree now, investing more than Rs 250 crore in Vizag and in other places. So, overall we see a huge growth in the pharmaceutical outsourcing industry. Q: Does this capital raising have anything to do with API supply facilities that you are doing for the supply of Telaprevir to Vertex? A: We don't talk about the customers, but the plant being built in Vizag is only for supply to various pharmaceutical companies. Q: Can you walk us through how much dilution this particular move has led to for your company? What kind of impact that would have on earnings? A: The total dilution is to the extent of around 11.9%. Our own equity percentage is coming down from 48% to 42%. But the debt/equity ratio is going to improve from 3.93 to 1.51. That is very significant, given the sale of land in Velachery. Q: Even so more than 11% equity dilution is quite high. You mentioned that you have more aggressive capex plans. Will you be looking to raise more money through the course of this calendar or financial year? A: No, we will be able to manage it with our own internal accruals. We don't intend going for any more equity infusion. We will be able to manage with the loans, which we are taking from the bank and from the internal accruals.